Stocks rose Friday, with the markets focusing on a rebound in demand for capital goods over concern about stagnant August home sales.
The Dow Jones industrial average closed up 197.84, or 1.86%, at 10,860.26; the S&P 500 rose 23.84, or 2.12%, closing at 1,148.67; and the Nasdaq composite was up 54.14, or 2.33%, to close at 2,381.22. All numbers are preliminary.
Stock futures extended gains after orders for U.S. capital equipment rebounded in August, signaling a slowdown in business investment may be less severe than some economists projected. Durable goods orders excluding transportation climbed 2% in August, the Commerce Department said in Washington.
The benchmark gauge kept its gains after a report showed sales of new homes held steady at 288,000 in August, unchanged from a July figure that was revised upward. Economists surveyed by Bloomberg forecast house sales would rise to 295,000.
The S&P 500 should gain an additional 6.6% this year to begin a decade of 8% annual returns as concerns about a return to recession prove unfounded, BlackRock Vice Chairman Bob Doll said Thursday night in Toronto.
“The economic recovery is becoming self-sustaining,” Mr. Doll said. “Given how scared corporations got and how much they cut costs, that has created an immense opportunity for earnings.”